Stocks closed narrowly mixed yesterday with the S&P off just -0.04%, while the Nasdaq was up 0.28%. The markets were up for most of the day, but gave it all back in the last half hour.

Position squaring ahead of the 3-day holiday weekend likely also played a part. (The markets will be closed on Monday for Memorial Day.)

Over the past several weeks the market has been energized by a host of things, including last week's high profile announcement of a 90-day deal with China, which dramatically slashed tariffs on both countries while they hash out details on a broader agreement; the previous week's trade deal with the U.K., which lowered reciprocal tariffs and provided greater access to U.S. exports; and the expectation for many more trade deal announcements in the coming weeks.

Along the way, we got another better-than-expected employment report, several better-than-expected inflation reports, and another better-than-expected earnings season, all of which underscore the economy's growth and resilience.

Given the sharp rally, the market was due for a pullback, which allow traders to pull profits and reposition before the next leg up.

And the recent credit downgrade by Moody's (which really only brought them into alignment with Fitch's downgrade from 2023, and S&P Global's downgrade going all the way back to 2011) presented the perfect excuse to do so.

The focus on the nation's deficit has only been magnified by the headline's surrounding the Administration's budget bill (aka, "big, beautiful bill"), which tackles many top priorities of the White House, including renewing the 2017 tax cuts (and then some), which expires at the end of the year.

The bill passed the House of Representatives on Thursday morning.

Proponents of the bill will point to the importance of the tax cuts, while critics will point to the ballooning debt.

Either way, it now heads to the Senate where more debate will take place.

In the meantime, there are plenty of reasons to be optimistic about both the economy and the market.

Couple that with the ongoing tech boom (yes, it's an AI-fueled tech boom), which many, including myself, believe this could be reminiscent of the internet-driven tech boom back in 1995 thru 1999, where we saw 20%+ gains for each of those 5 years, and you have a market poised to breakout to the upside.

We have one more day to go this week.

Whether it's up or down for the day or the week, the panic that was seen in April has seemingly turned into a fear of missing out.

And that bodes well for more gains to come.

Have a great 3-day long Memorial Day weekend.

See you on Tuesday,